Dividend taxation limited in source state when recipient is beneficial owner, with exceptions for permanent establishments.

Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in both States, but where the recipient is the beneficial owner the tax charged by the company's State is limited by a withholding cap. "Dividends" encompass income from shares and similar non-debt profit-participating rights. The withholding limit is inapplicable if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the distributing State, in which case rules for business profits or independent personal services apply; source State taxation of dividends and undistributed profits is otherwise restricted.

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